It’s just TV, now make it pay
March 18, 2013
It’s that time of year again and the industry is gathering in London for the TV Connect event. This is the latest iteration of what was founded as the IPTV World Forum, and the more generic name reflects the maturity of the business and the increasing transparency of the barriers between once competing segments.
Virgin Media, born of cable cos, is a major ISP, Sky has just bought Telefónica UK’s fixed and broadband networks to go to number two in the broadband provider league and operates its own pay-as-you-go OTT service, BT is gate crashing the TV party with big buys in sport, and Tesco – which dwarfs any of the above in terms of its take of British pay packets – is ramping up its blinkbox service.
Where will it all end? There’s a lot of choice for the consumer, so pricing should stay keen. That means the market for ‘tv that is connected’ will doubtless grow many fold – but will the monetisation grow at a rate that produces margins sufficient to fund the capex to up rate the networks to serve the volume of traffic? As revealed in our main feature, the UK is up rating fixed line via FTTC – understandable given our uniquely horizontal housing stock – but not the way to achieve genuinely fast ubiquitous access. We probably won’t have hit 100Mb for all by the time several of our neighbours are taking 1Gb for granted. The implications of this for the economy as a whole go far beyond TV.
Some of the complexities of the market will probably be alleviated by some of the players getting knocked out. It is inevitable when hitters as heavy as those listed above go to war, and we haven’t even mentioned the likes of Neflix, LOVEFiLM, Google or Apple.
Tips for winner and losers? I don’t think I’ll hand over that kind of hostage to fortune just yet. But perhaps a form guide: 1. Winners will need big financial fire power and conviction (sometimes confused with hubris or even foolishness), to believe they can spend massive fortunes on rights and then convert them to profitable subscribers. Of course, some have experience here, and some don’t. 2. Leveraging their influence with suppliers and with existing customers. There’s plenty of evidence on past ability here too. 3. Brilliant, creative marketing and an affinity with innovation. Make up your own minds.
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